Updated September 4, 2026. Quick answer: Partially, and it depends on age. Delaware exempts up to $2,000 of pension income under age 60, rising to $12,500 combined with other eligible retirement income at 60 and older, for public, private and federal pensions alike. Military retirees under 60 get a separate, larger $12,500 carve-out.
More on public pension systems, topic by topic: Delaware SEPP disability pension and Delaware SEPP early retirement.
State retirement-income forms, line by line: Delaware PIT-RES pension exclusion.
Inherited an IRA? What the state’s own documents say about taxing those withdrawals: Delaware tax on inherited IRA withdrawals.
Hold a 403(b) or 457(b)? What the state’s own documents say about taxing those withdrawals: does Delaware tax 403(b) and 457(b) withdrawals.
Married, or planning for a spouse’s death? Whether the state is a community property state, from its own statutes: Is Delaware a community property state?.
Selling your home? How the state taxes the profit, from its own tax documents: Does Delaware tax the profit from selling your home?.
The state’s income tax schedule: the Delaware 2026 tax brackets (pending).
Trusts have their own page: does Delaware tax trust income.
Dividends and interest have their own page: does Delaware tax dividends and interest.
Inheriting from, or planning for, someone in this state? Whether the state has an inheritance tax, from its own tax documents: Does Delaware have an inheritance tax?.
Annuity payments have their own page: does Delaware tax annuity income.
Making a gift or planning an estate? The state’s gift tax answer, from its own tax documents: Does Delaware have a gift tax?.
Planning for what you leave behind? The state’s estate tax answer, from its own tax documents: Does Delaware have an estate tax?.
Military retired pay has its own page: does Delaware tax military retirement.
Saving for a child’s college? The state’s 529 break has its own page: Delaware 529 plan tax deduction.
Selling stocks, funds or real estate has its own page: does Delaware tax capital gains.
Withdrawals from a 401(k) or IRA have their own page: does Delaware tax 401(k) and IRA withdrawals.
The Delaware State Employees’ Pension Plan survivor and refund rules, from the plan’s own summary: Delaware state pension retirement decisions.
More on Delaware: When Is Probate Required in Delaware?
Related state retirement tax guides: Does Delaware Tax Social Security? and Maryland to Delaware Retirement Taxes.
Confidence note: high. This page is scoped to pension, IRA and 401(k) taxation specifically. For the state’s full retirement-tax picture (Social Security, tax rates, estate and probate), see how Delaware taxes retirement income generally.
Pending, not current law: Bills to raise the general exclusion to $25,000 (SB201, HB108) have both stalled in committee with no floor votes; the general exclusion under current law remains $2,000/$12,500 (only the military pension limit is scheduled to rise, see the military retirement row).
The rule in the source’s own words. Delaware Code, title 30, section 1106(b)(3): “not to exceed $12,500, as pensions from employers, the United States, this State, or any subdivision of this State” (source, read October 5, 2026). This page’s governing citation: 30 Del. C. sec. 1106(b)(3).
A worked example. Take a Delaware resident under 60 with a $40,000 non-military pension. For 2025 the exclusion is $2,000, so $38,000 stays in Delaware taxable income (the 2025 PIT-RES instructions) (Delaware Division of Revenue, 2025 PIT-RES instructions).
How pensions and retirement-account withdrawals are taxed
| Public (state/local government) pensions | Partially exempt: up to $2,000 under age 60, or up to $12,500 combined with other eligible retirement income at 60 or older. The current statute text also requires people 60 or older to have been legally domiciled in Delaware for at least 3 years (5 years for those domiciled on or after January 1, 2027); the Division’s 2025 resident instructions do not mention that condition. |
|---|---|
| Private (employer) pensions | Identical treatment to public pensions; the statute does not distinguish by employer type. |
| Federal government pensions (FERS/CSRS) | Identical treatment to public and private pensions: “the United States” is named in the same statutory clause as “this State.” |
| Military retirement pay | Under age 60, military retirees get a separate, larger exclusion of up to $12,500 (versus the general $2,000), effective for tax years beginning January 1, 2022. The current statute text raises that military limit to $15,000 for tax year 2027, $20,000 for 2028 and $25,000 for 2029 and later, and from 2027 lets people 60 or older use the greater of the general $12,500 limit or the military amount. |
| IRA and 401(k)/403(b) distributions | IRA and 401(k) distributions are confirmed by name as “eligible retirement income” within the same combined age-based caps described above. |
| General retirement-income exclusion | An additional standard deduction of $2,500 per condition (age 65+, blindness), capped at $5,000 per individual, separate from the pension exclusion. Social Security and Railroad Retirement income is separately fully excluded. |
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Social Security is never taxed by Delaware. Social Security has its own rules in every state; see the full breakdown in how Delaware taxes retirement income generally.
Figures verified against 30 Del. C. secs. 1106 and 1108 (Delaware Code online) and the Division of Revenue 2025 resident instructions (PIT-RES) on September 30, 2026; the status of bills SB201 and HB108 and the effective date of the 60-or-older domicile condition were not re-checked.
Statute and sources
Governing citation: 30 Del. C. sec. 1106(b)(3) (pension exclusion), sec. 1108(b) (age-65 standard-deduction add-on).
Read September 4, 2026.
Related: how Delaware taxes retirement income generally · does Delaware tax Roth conversions? · Roth conversion taxes, all 51 jurisdictions.
General information drawn from each state’s own published statutes and revenue-department guidance, not legal, tax or financial advice. Figures and exemption amounts are current as of the date in the quick answer, are set by state law, and can change by future legislation; any pending bill named on this page is not yet law. This page cannot see your own return, which governs. We are not a law firm, a tax adviser, or a fiduciary, and this is not personalized advice.
For your own numbers, run the Retirement Tax Comparison Tool (2026): Compare Any Two States.
See Retirement Tax Relocation (2026): The Four Taxes That Change When You Move for the full state by state breakdown.